Chip market still shrinking versus 2011, says SIA

LONDON – The three-month average of worldwide sales of semiconductors reached $24.39 billion for the month of May 2012, 3.4 percent lower than in May 2011, but a 1.4 percent increase over the prior month when sales were $24.07 billion, according to the Semiconductor Industry Association (SIA).

In April the three-month average was 2.9 percent down on the equivalent figure in 2011, nonetheless May's result came in ahead of the prediction of analyst Bruce Diesen of Carnegie Group (Oslo, Norway).

"Recent sales totals are in line with industry projections of modest growth for the remainder of 2012, but a sluggish global economy continues to provide substantial headwinds, limiting more robust growth," said Brian Toohey, president & CEO of the SIA, in a statement. The second-half growth will struggle to overturn a first half that has been down on 2011 and the SIA is predicting that global chip sales in 2012 will be flat compared with 2011.

Japan realized an increase in sales from the three-month avergae of May 2011 to the three-month-average of May 2012 (0.4 percent), while Asia Pacific (-1.9 percent), the Americas (-3.2 percent) and Europe (-13.6 percent) all saw year-to-year decreases.

Monthly data is given by the SIA as a three-month average although the source of the data, the World Semiconductor Trade Statistics organization, tracks actual monthly data. The SIA and other regional semiconductor industry bodies like to use the averaged data because it smoothes out the actual data that usually show troughs at the beginnings of the quarters and peaks at the ends of the quarters.

As expected Asia is showing the strong growth whereas Eruope is showing big negative growth. I think chip market growth will significantly improve in coming quarters because EU is doing all it could to tackle the euro-crisis.